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H-E-B Pharmacy Exec: Medicaid Reimbursement Cuts ‘Devastating’

Describing cuts to Medicaid reimbursement as &#8220;devastating&#8221; to retail pharmacies, Dennis Wiesner, senior director, privacy, regulatory, government and industry affairs, and pharmacy managed care, H.E. Butt Grocery Co., San Antonio, yesterday called for Congress to pass the Fair Medicaid Drug Payment Act, which would permanently overturn the average manufacturer&#8217;s price regulations put in place by the Centers for Medicare and Medicaid Services, Baltimore, and now blocked by a federal judge.

DAN ALAIMO | May 15, 2008

WASHINGTON — Describing cuts to Medicaid reimbursement as “devastating” to retail pharmacies, Dennis Wiesner, senior director, privacy, regulatory, government and industry affairs, and pharmacy managed care, H.E. Butt Grocery Co., San Antonio, yesterday called for Congress to pass the Fair Medicaid Drug Payment Act, which would permanently overturn the average manufacturer’s price regulations put in place by the Centers for Medicare and Medicaid Services, Baltimore, and now blocked by a federal judge. If allowed to stand, Medicaid reimbursements would be based on AMP, whereas they used to be based on AWP, or average wholesale price. AMP has historically been used as a benchmark for manufacturer rebates, but CMS seeks to implement AMP as a reimbursement benchmark, potentially putting 10,000 to 12,000 pharmacies out of business, according to industry estimates. “The AMP rule was fundamentally flawed in many ways, but in particular, it fails to provide a thorough analysis of the economic impact that the rule would have on small pharmacy businesses, as required under the Regulatory Flexibility Act,” Wiesner said. He testified at a hearing on the impact of CMS regulations before the U.S. House of Representatives Committee on Small Business’s Subcommittee on Regulations, Health Care and Trade on behalf of the National Association of Chain Drug Stores, Alexandria, Va. He also told the hearing that CMS regulations will limit the ability of pharmacies to provide 90-day supplies of medications to Medicare Part D beneficiaries, and that under Medicare Part B, new program requirements and competitive bidding will impose significant administrative and financial burdens on pharmacies that provide durable medical equipment, particularly diabetes testing supplies.